"We may jump into the race to acquire KEB, but discussions with the government on the issue should come first," said
Min Euoo-sung,
who also serves as chairman of the bank's holding company, KDB Financial Group.

"We have an interest in acquiring domestic and overseas financial firms to increase our deposit base, and KEB may be the only option for M&As," he said Wednesday.

Mr. Min said KDB has no interest in buying a 57% stake in
Woori Finance Holdings
that has been put up for sale by the government.

After signing a preliminary agreement with Dallas-based Lone Star, Hana is conducting due diligence to buy a 51% stake in KEB in a deal worth about $4 billion, which may be finalized as early as next week.

"Lone Star may be in talks with Hana to raise the price for a 51% stake in KEB as ANZ is still interested in KEB," Mr. Shim said.

Analysts said Mr. Min was reiterating KDB's stance on potential mergers and acquisitions as it aims to buy a bank with a strong retail business to make its planned initial public offering next year a success.

KDB Financial was officially created in late 2009, when the government split KDB's operations into two separate entities. KDB inherited the corporate- and investment-banking operations, while Korea Finance Corp. assumed the role of a national policy and development bank providing financing to firms and projects to boost South Korea's economic strength.